Western Midstream Partners, LP (WES): BCG Matrix [Dec-2025 Updated]

You're looking to cut through the noise on Western Midstream Partners, LP's (WES) portfolio as we hit late 2025, so I've mapped their assets onto the Boston Consulting Group Matrix to show you exactly where the capital is working hardest right now. Honestly, the Delaware Basin Natural Gas segment is the clear Star, powering an expected 55% of Adjusted EBITDA, while the reliable DJ Basin acts as a solid Cash Cow, kicking in about 30% of the total. But the real strategic question involves the Question Marks, like the Produced Water build-out, which is driving a significant portion of that $625 million to $775 million capital expenditure budget; let's break down the quick math on these four quadrants to see where WES is winning and where they're making their biggest calculated bets.

Background of Western Midstream Partners, LP (WES)

You're looking at Western Midstream Partners, LP (WES), which operates as a master limited partnership, or MLP. Essentially, WES is in the business of owning and running the essential infrastructure that moves energy-think gathering, processing, treating, and transporting natural gas, crude oil, NGLs (natural gas liquids), and produced water for its customers. This company has a strong footprint, with core assets concentrated in key US plays like the Delaware Basin in West Texas and New Mexico, the DJ Basin in Colorado, and the Powder River Basin in Wyoming.

What's interesting right now, as we look toward late 2025, is the strategic moves WES has made to solidify its position, especially in that high-activity Delaware Basin. Occidental Petroleum (OXY) remains a major stakeholder, holding a 44.7% ownership stake as of the second quarter of 2025. The company has been consistently delivering strong operational results; for example, they hit a record third-quarter Adjusted EBITDA of $633.8 million and reported net income attributable to limited partners of $331.7 million for Q3 2025.

A significant event for the year was the closing of the Aris Water Solutions, Inc. acquisition on October 15, 2025. That deal immediately positioned Western Midstream Partners, LP as one of the top three-stream midstream providers in the Delaware Basin. This growth focus is supported by solid cash generation; Q3 2025 Free Cash Flow came in at $397.4 million, allowing them to maintain their quarterly distribution at $0.910 per unit, which annualizes to $3.64 per unit.

Operationally, the throughput numbers tell a story of continued activity, though with some segment variation late in the year. For the third quarter of 2025, natural-gas throughput averaged 5.4 Bcf/d, a 2% sequential increase, while crude oil and NGLs throughput was 510 MBbls/d, which was actually down 4% from the prior quarter. Looking ahead, WES is banking on major capacity expansions, like the new 300 MMcf/d cryogenic processing train at North Loving and the Pathfinder pipeline, both slated to come online in early Q2 2027, which should significantly boost future revenues. Honestly, the company expects to land near the high end of its 2025 Adjusted EBITDA guidance range of $2,350 million to $2,550 million for the full year.

Western Midstream Partners, LP (WES) - BCG Matrix: Stars

Stars in the Boston Consulting Group Matrix represent business units with a high market share in a high-growth market. For Western Midstream Partners, LP (WES), the Delaware Basin natural gas operations clearly fit this profile, demanding significant investment to maintain leadership while promising future conversion to Cash Cows as market growth matures.

The Delaware Basin Natural Gas segment is the clear Star, evidenced by its operational scale and financial impact. In the first quarter of 2025, this segment delivered a record throughput of 2.0 Bcf/d. This performance is central to the company's financial health, driving 55% of expected 2025 Adjusted EBITDA. For context, the Q1 2025 Adjusted EBITDA for the entire partnership was $593.6 million, with Net Income attributable to limited partners at $301.8 million.

Growth in this segment is being aggressively supported through capital deployment, such as the sanctioning of North Loving Train II. This project involves a new 300 Mmcf/d cryogenic plant capacity, a major investment aimed squarely at the high-growth Permian gas processing market. The initial North Loving Plant, which started up in late February 2025, already added 250 MMcf/d, bringing the West Texas complex capacity to approximately 2.2 Bcf/d. The addition of Train II is set to further increase this to roughly 2.5 Bcf/d by early second quarter 2027.

The overall portfolio outlook reflects this focus on high-growth areas. Western Midstream Partners, LP expects mid-single-digit natural gas throughput growth for the full year 2025, which is noted as the highest growth product stream across the portfolio. This contrasts with the low-single-digit growth expected for crude oil and NGLs.

The market position within this high-growth area is substantial, reflecting leadership status. The company holds a top-five market share in Delaware Basin natural gas processing capacity at 2,190 MMcf/d. This strong positioning is what qualifies it as a Star, as it possesses the market share to capture the majority of the market's growth.

You can see the key metrics defining this Star segment below:

• Delaware Basin Natural Gas throughput reached 2.0 Bcf/d in Q1 2025.
• Expected 2025 Adjusted EBITDA contribution from the Delaware Basin is 55%.
• North Loving Train II adds 300 Mmcf/d of cryogenic processing capacity.
• Projected 2025 natural gas throughput growth is in the mid-single digits.
• Market share in Delaware Basin processing capacity is 2,190 MMcf/d.

The investment required to maintain this growth trajectory is significant, which is typical for a Star. The 2025 full-year guidance reflects this, projecting total capital expenditures between $625 million and $775 million, supporting the path toward sustained success. If this growth continues until the market slows, these assets are positioned to become the next generation of Cash Cows, supporting the partnership's distribution, which was recently declared at $0.910 per unit for Q1 2025, or $3.64 per unit annualized.

Here is a snapshot comparing the Star asset's operational scale and financial impact:

Western Midstream Partners, LP (WES) - BCG Matrix: Cash Cows

You're analyzing the core, stable assets of Western Midstream Partners, LP (WES), the ones that reliably fund the rest of the enterprise. These are your Cash Cows, units with high market share in mature, yet essential, infrastructure markets.

DJ Basin Gas Gathering & Processing represents a core, high-utilization asset base. This segment is underpinned by long-term minimum volume commitments (MVCs) with Occidental Petroleum (OXY), ensuring revenue predictability. For example, throughput in the Delaware Basin, a key area, reached a record $\mathbf{2.1}$ Bcf/d in the second quarter of 2025, with overall Delaware Basin natural gas processing capacity now at approximately $\mathbf{2.2}$ Bcf/d following the North Loving plant start-up. By the third quarter of 2025, WES reported record natural gas processing volumes of $\mathbf{5.5}$ billion cubic feet per day.

The overall financial performance confirms this segment's strength. Western Midstream Partners, LP reported record second-quarter 2025 Adjusted EBITDA of $\mathbf{\$617.9}$ million, followed by a record third-quarter 2025 Adjusted EBITDA of $\mathbf{\$633.8}$ million. The full-year 2025 Adjusted EBITDA guidance remains firm, projected between $\mathbf{\$2.350}$ billion and $\mathbf{\$2.550}$ billion. This high level of cash generation supports the firm's capital returns.

Legacy Crude Oil and NGLs Gathering provides the necessary stability. While throughput for crude oil and NGLs saw a sequential decrease in Q1 2025, management forecasts low-single-digit growth for this segment in 2025. This segment's fee-based contracts help insulate profitability from commodity swings, contributing to the overall predictable cash flow profile.

The resulting financial strength is evident in the balance sheet metrics, which allow for consistent shareholder returns. Western Midstream Partners, LP maintains an investment-grade credit rating. As of the third quarter of 2025, the net leverage ratio stood at $\mathbf{2.8x}$, which is better than the target of below $\mathbf{3.0x}$. This strong footing supports the annualized distribution.

Here is a snapshot of the cash flow and distribution stability:

The cash flow generated by these mature assets is critical for corporate funding needs. The Free Cash Flow (FCF) after distributions for the second quarter of 2025 was $\mathbf{\$33.1}$ million, and it grew to $\mathbf{\$42.2}$ million in the third quarter. This cash is used to maintain operations and fund shareholder returns, which is the primary function of a Cash Cow.

The Cash Cow segment's role in the capital allocation framework includes:

• Supporting the annualized distribution of $\mathbf{\$3.64}$ per unit.
• Maintaining an investment-grade credit rating.
• Providing cash flow to fund infrastructure support, such as the new $\mathbf{300}$ MMcf/d cryogenic natural-gas processing train sanctioned for the North Loving plant.
• Generating Free Cash Flow after distributions, which was $\mathbf{\$42.2}$ million in Q3 2025.
• Operating with high utilization, such as the Delaware Basin gas throughput reaching $\mathbf{2.1}$ Bcf/d in Q2 2025.

Western Midstream Partners, LP (WES) - BCG Matrix: Dogs

Dogs, are units or products with a low market share and low growth rates. They frequently break even, neither earning nor consuming much cash. Dogs are generally considered cash traps because businesses have money tied up in them, even though they bring back almost nothing in return. These business units are prime candidates for divestiture.

For Western Midstream Partners, LP (WES), the assets fitting this profile are those with lower growth profiles compared to the core Delaware Basin operations, which are driving record performance, such as the Q3 2025 Adjusted EBITDA of $633.8 million.

Powder River Basin (PRB) Assets

The Powder River Basin (PRB) Assets represent a segment with a smaller strategic focus and lower relative contribution to overall profitability. In the first quarter of 2025, the natural-gas throughput in the PRB was 463 MMcf/d, marking a 5% sequential-quarter decline from 488 MMcf/d in the prior period. Similarly, operated crude-oil and NGLs throughput for the PRB in Q1 2025 was 25 MBbls/d, down 7% sequentially from 27 MBbls/d.

The relative scale of PRB is evident when looking at the expected 2025 EBITDA contribution breakdown, where the Delaware Basin accounted for 55% and the DJ Basin for 30%, leaving the PRB and equity investments to account for the remaining 15%.

Commodity-Sensitive Assets

Segments that are more exposed to commodity price fluctuations and lower production activity are candidates for the Dogs quadrant, as they can see throughput declines that require offsetting activity elsewhere. In the third quarter of 2025, Western Midstream Partners, LP experienced pressure in this area, as crude oil and NGLs throughput fell 4% sequentially to 510 MBbls/d.

This decline in liquids throughput contrasts sharply with the growth seen in natural gas, which increased 2% sequentially to 5.5 Bcf/d in Q3 2025.

Non-Core, Older Infrastructure

Assets outside the primary growth areas of the Delaware and DJ basins require maintenance capital but offer minimal upside, tying up cash that could be deployed to higher-return projects. While specific maintenance capital figures for non-core assets aren't itemized, the overall 2025 total capital expenditures guidance is set between $625 million and $775 million, which must cover both growth projects and upkeep for all systems.

Low-Growth Throughput

The sequential drop in throughput for crude oil and NGLs in Q3 2025 signals that some mature assets are definitely seeing volume pressure. This 4% sequential decline in crude oil and NGLs throughput indicates a lack of growth momentum in these specific product lines or associated assets.

The following table summarizes the Q1 2025 operated throughput comparisons for key basins, illustrating the relative scale and recent performance pressure:

The Q3 2025 performance further highlights the trend for liquids, with total crude-oil and NGLs throughput averaging 510 MBbls/d, a 4% sequential decrease.

• Net income attributable to limited partners for Q3 2025: $331.7 million.
• Cash flows provided by operating activities for Q3 2025: $570.2 million.
• The distribution per unit remained at $0.910 for the third quarter.
• Total 2025 Adjusted EBITDA guidance range: $2.350 billion to $2.550 billion.

Western Midstream Partners, LP (WES) - BCG Matrix: Question Marks

You're looking at the big capital outlays Western Midstream Partners, LP (WES) is making right now, which clearly land in the Question Marks quadrant-high growth potential, but they are cash-hungry investments with market share still being won.

The water segment is the focus here, driven by major infrastructure build-out and a significant acquisition. These moves are designed to capture future market share in a growing area, but they require serious cash deployment now.

Produced Water Infrastructure Expansion

The Pathfinder pipeline project is a prime example of this high-capex strategy. Western Midstream Partners, LP (WES) sanctioned this to build out its Delaware Basin produced-water system. You're looking at an investment of approximately $400.0 million to $450.0 million over the next 24 months for this and related facilities.

This specific pipeline is a 42-mile, 30-inch steel line. Its initial capacity is set to transport over 800 MBbls/d of produced water, with the potential to expand that up to 1.2 MMb/d. This project is backed by a new long-term agreement with Occidental Petroleum (OXY), which includes firm capacity commitments of 280 Mb/d for gathering/transportation and 220 Mb/d for disposal.

Water Segment EBITDA Share Growth

The goal of these investments, including the Aris Water Solutions deal, is to rapidly shift the revenue mix. Management forecasts that the share of associated water in Adjusted EBITDA is expected to grow from 10% to 16% by the end of 2025. To give you context, water disposal was already accounting for approximately ~12% of the company's earnings before this latest push.

This segment is definitely consuming cash to secure that future growth, which is the classic Question Mark profile. For instance, Q3 2025 Adjusted EBITDA was $633.8 million, and these water projects are the primary drivers for future growth beyond that base.

Aris Water Solutions Acquisition

The acquisition of Aris Water Solutions, Inc. closed on October 15, 2025. The total enterprise value for this deal was approximately $2.0 billion before transaction costs. The consideration mix was heavy on equity, involving the issuance of approximately 26.6 million common units and a cash payment of $415.0 million (before transaction costs), plus assuming about $500.0 million of debt.

This move significantly expands the footprint, adding about 790 miles of produced-water pipeline and 1,800 MBbls/d of handling capacity. Western Midstream Partners, LP (WES) is targeting $40 million in estimated annualized cost synergies from this integration.

Total 2025 Capital Expenditures

These major water projects, combined with other planned developments like the North Loving Train II expansion, drive the overall spending plan. The total capital expenditures guidance for fiscal year 2025 is set in a range between $625.0 million and $775.0 million. This high level of spending is necessary to quickly gain market share in the produced-water space, turning these Question Marks into potential Stars.

Here's a quick look at how the key financial metrics relate to this high-growth spending:

You need to watch the execution on these projects closely; if the market share doesn't materialize quickly, these cash consumers risk becoming Dogs.